WarnerMedia is preparing a restructuring that according to reports will cut costs by more than 20% and result in the loss of "thousands" of jobs to help offset the continued negative impact of the pandemic on its businesses.
WarnerMedia, the content arm of telco AT&T that includes such iconic brands as HBO, HBO Max, TBS, TNT and Warner Bros., is preparing a massive restructuring to reduce costs in the wake of the pandemic, which has decimated its operations, especially those reliant on advertising, subscriptions and box office receipts.
According to a report in the Wall Street Journal, the restructuring is expected to begin in the coming weeks and will affect "thousands" of WarnerMedia employees at its studios and cable TV channels like HBO, TBS and TNT.
The moves come just a few months after a management shakeup that saw the departure of WarnerMedia Entertainment chairman Bob Greenblatt and several executives in August. Those changes also involved layoffs and came just months after former Hulu CEO Jason Kilar came on board as WarnerMedia CEO. Kilar was named to the position in April, replacing John Stankey, who became CEO of parent AT&T.
The pandemic and the shift toward streaming media has poked holes in advertising sales across the industry. WarnerMedia has also been a part of that shift, launching the HBO Max streaming service on May 27 and placing much of its future growth hopes in that side of the business.
WarnerMedia confirmed the restructuring, but would not offer details as to how many employees would be let go or what divisions would be affected. In a statement the company acknowledged the pandemic has wreaked havoc on the industry.
“Like the rest of the entertainment industry, we have not been immune to the significant impact of the pandemic,” WarnerMedia said in a statement. “That includes an acceleration in shifting consumer behavior, especially in the way content is being viewed. We shared with our employees recently that the organization will be restructured to respond to those changes and prioritize growth opportunities, with an emphasis on direct-to-consumer. We are in the midst of that process and it will involve increased investments in priority areas and, unfortunately, reductions in others.”
